Australian coal mining company Bandanna Energy has submitted a mining lease application to develop the Springsure Creek project in central Queensland.

Springsure Creek Coal formulated the application following consultations with community members, the Central Highlands Regional Council and the Queensland Government.

The application, if approved, will allow underground coal mining activities in Springsure Creek, located south east of Emerald.

Bandanna Energy managing director Michael Gray said that the large-scale greenfield thermal coal project has port and rail capacity facilities under construction and is the only project of its kind in the country.

"Despite challenging conditions in current coal markets, Bandanna is well placed, with a strong cash position and ongoing discussions with project partners, to enable the project to be developed and commence production in a period when forecasters predict significant further demand for thermal coal," Gray said.

"Whilst existing coal producers are scaling back current operations, Bandanna remains focused on progressing development of the Springsure Creek Project to take advantage of anticipated improved market conditions from 2015 and beyond."

With the submission of the application, Springsure Creek Coal expects to hold discussions to enter into potential financing partnerships for the project in the third quarter of this year.

The project’s Definitive Feasibility Study (DFS) is currently under an independent technical review, the result of which will determine the key point of discussions.